1099R taxable for PA?

[abs96]

Tax client has a 1099R with code 2.  Early distribution under 59 1/2 but over age 55.  Separation from service but has years of service in according to plan.  Is this taxable for PA?

Same tax client had another 1099R with code L - Is this taxable for PA?

[PATAX]

Abs, the PA Department of Revenue customer service section has an excellent articles on this. Go on to this website and you will see the different questions that people have asked concerning this and you should be able to find your answer. Keep in mind that your client may have basis.

[qbteachmt · Accepted solution]

"Early distribution under 59 1/2 but over age 55."

That's a difference between IRA and employer 401(k). Which type of plan account was this?

The L means unpaid loan, deemed distribution.

PA does not conform to the CARES Act, so some things that would be allowed for Fed are not in PA:

https://www.revenue.pa.gov/COVID19/Documents/cares_act.pdf

https://revenue-pa.custhelp.com/app/answers/detail/a_id/1470/~/how-do-i-know-if-the-amount-on-my-109...

[PATAX]

👍

[abs96]

Does the basis include what the employer puts in as well as the employee?

[abs96]

Thank You.

[qbteachmt]

"Does the basis include what the employer puts in as well as the employee?"

Basis = money post tax, or already taxed and then invested.

Not typically. Or, Neither, typically. The employer typically puts in money pre-tax (even if they are matching your client's Roth amounts)  and the employee typically puts in money pre-tax (unless they are putting into, for instance, Roth 401(k) ).

No one on the internet knows what your client did or the type of plan the employer offered or how the employee participated.